LYFT Inc (NASDAQ;LYFT) stock rose 2.48% (As on September 27, 1:18:42 AM UTC-4, Source: Google Finance) though UBS downgraded the stock to neutral from a buy. UBS analyst Lloyd Walmsley cut his stock price target by 68%, to $16 from $50. The firm said it’s skeptical that Lyft can deliver top-line growth at the industry level. UBS backed away from its bullish call on the ride-hailing company, citing concerns the company won’t be able to match the revenue growth of its competition in an environment of slowing economic growth and a weaker active-rider environment. “We see Lyft benefiting from a continued recovery coming out of COVID in the near term, but we are on the sidelines for the stock as we think the company’s long-term growth is structurally lower in the core ride-sharing business than Street is modeling,” Walmsley wrote in a note to clients. He believes the FactSet consensus for fourth-quarter revenue of $1.17 billion is “too high,” based on UBS’s proprietary survey and app data showing that drivers prefer rival Uber Inc. that Lyft isn’t its drivers’ “main” app and because Uber has more app downloads and usage across drivers and consumers. “Drivers typically multi-app, and Uber not only has a lion’s share of the market, its onboarding process is faster and it offers drivers more earnings opportunities,” Walmsley wrote. Among other concerns, Walmsley believes Lyft’s “U.S.-centric” business exposes the company more than Uber to rising ride-share insurance costs, which could increase as third-party insurance contracts renew Oct. 1. He also sees risk that Lyft will need more reinvestment just to maintain an “attractive” revenue growth rate. “Given the lack of these growth drivers, we think Lyft will under grow the market,” Walmsley wrote. Walmsley currently expects Lyft to record compounded revenue growth of 18% from 2022 to 2024, below Street expectations of 20% growth, and below his estimate for Uber’s revenue growth of 21%.

On the other hand, Lyft and Motional, a global leader in driverless technology, announced the launch of Motional’s new all-electric IONIQ 5-based robotaxi, an autonomous vehicle (AV) designed for fully driverless ride-hail operation, on the Lyft network in Las Vegas. The launch is the next milestone in the lead-up to Motional and Lyft’s fully driverless service, planning to begin in 2023 and scaling to multiple U.S. cities.